Such bonds are often used by developers, and Kevin Lewis, 43, obtained bank loans based on the seeming assets referenced by the fake documents, starting in 1997 with a relatively small loan and increasing his portfolio over time, reports the Associated Press. He pleaded guilty yesterday in federal court in Little Rock to one count of bank fraud.

A prosecutor said the scheme, which forced at least one bank into receivership, may be the biggest fraud ever perpetrated in the state.

Lewis reportedly used the money to fund his law firm operations and other business ventures, live an opulent lifestyle and take majority control of one bank (doing so helped him sell fake bonds to other banks). He never defaulted on the bonds, using money from new fake-bond-based loans to pay interest on the bonds when due. The scheme was eventually uncovered when a routine Federal Deposit Insurance Corp. audit of one bank last year found problems with its rural improvement bond portfolio.

Lewis is expected to get between 10 and 13 years when he is sentenced. He agreed to pay restitution of $40 million.

He said only “sorry” when asked to comment yesterday as he was leaving court.